Multi-dimensional and overlapping Nexus challenges affect many parts of rural sub-Saharan Africa. More than 90% of cropland is rainfed, less than one third of households have electricity at home, more than 15% of people report insufficient food intake and more than 40% of people live below the poverty line. Climate change impacts on vulnerable systems with limited adaptive capacity and strong population growth are increasing the magnitude of the challenge. As a result, there is a strong need for multi-level, multi-sector interventions (from national policies to regional/river basin-scale planning, to local planning and investment). To implement such actions, it is key to assess solutions (technology and investment) and appraise their feasibility and implementation potential (from both a policy and a financial point of view). In this study, we soft-link bottom-up process-based water and energy demand and techno-economic infrastructure assessment models into a multi-node, national Nexus-extended Integrated Assessment Model (MESSAGEix-Nexus) for supply and investment assessment. Based on the integrated modelling, we obtain an understanding of the role of an explicit consideration of (productive) energy access jointly with Water-Agriculture-Food interlinkages for rural Nexus infrastructure requirements, investment, and sustainable development objectives. This demonstrates how climate impacts and water and energy needs affect each other and jointly shape infrastructure and investment pathways. Then, by linking technical models with business models analysis, we are able to assess feasibility of implementation and appraise which are the key micro and macro determinants to ensure feasibility, investment, and uptake of small-scale Nexus infrastructure, crucial for rural development and adaptation to changing climate conditions. Altogether, our research demonstrates how national-scale integrated modelling with an explicit focus on Nexus interlinkages allows for assessing locally-relevant demand sources and investment needs, and their implications for sustainable development. In turn, this allows for deriving policy and investment-relevant insights.

Multi-dimensional and overlapping barriers to wellbeing severely affect many areas in rural sub-Saharan Africa. In the region, more than 90% of cropland is rainfed, less than one third of households have electricity, almost 60% of the population reports food insecurity, and more than 35% of the population lives below the international poverty line. Climate change impacts on vulnerable systems with limited adaptive capacity and strong population growth are increasing the magnitude of these challenges, slowing and potentially reversing development. Thus, there is a strong need for multi-sector interventions across multiple levels, from national policies, to regional and river catchment-scale planning, to local planning and investment. To implement such actions, it is key not only to assess technological solutions and their investment needs, but also to appraise their feasibility and implementation potential (from both a policy and a financial point of view). Here, we implement a modelling platform (RE4AFAGRI platform), which soft-links bottom-up process-based water and energy demand and techno-economic infrastructure assessment models (WaterCROP, M-LED, OnSSET) into a multi-node, national Nexus-extended Integrated Assessment Model (MESSAGEix-Nexus) for supply and investment assessment. The results of our analysis shed light on the role of water and energy demand in the agricultural sector for jointly affecting infrastructure and investment requirements for achieving rural sustainable development objectives. We find that scenarios with increased ambition in expanding irrigation and agricultural productivity result in improved diffusion and economic feasibility of infrastructure to provide universal energy access while supporting productive uses of energy. Moreover, we conduct business model analysis to appraise the framework conditions and micro and macro determinants that can ensure feasibility of investment and uptake of small-scale infrastructure, crucial for rural development. Altogether, our research demonstrates how integrated modelling with an explicit focus on Nexus interlinkages can represent the enabling role and the business conditions for renewable energy input in agriculture to become a leverage of rural sustainable development. In turn, important policy and investment-relevant insights can be derived.

AbstractThe chapter provides an economic, energy and historical context of the Middle East and North Africa region. Outlining the key demographic, economic and energy trends, it seeks to give a sense of the common features of the region while highlighting the great heterogeneity from an economic and energy perspective. By doing so, the chapter sets the scene on the need, capability and challenges as well as opportunities of the energy transformation in the region and its geopolitical consequences.

AbstractThis chapter presents the present energy, economic and political landscape of the MENA region, country by country. While fossil fuels have been at the center of this landscape in the MENA region, each MENA country has gone through a transformation of its energy system. Understanding this historical evolution is instrumental to better understand the starting point for future national energy transformations. While fossil fuels play a key role in all national energy sectors, countries vary regarding energy endowment, population size and economics. The chapter highlights the clear regional cleavage between hydrocarbon-exporting and hydrocarbon-importing countries and its consequences on national energy sector evolutions.

Replication data for the LEAP-RE RE4AFAGRI Platform, code and user guide hosted on https://github.com/iiasa/RE4AFAGRI_platform. The current version (0.2) of the data repository contains input data to replicate: - Africa-wide analysis in WaterCROP - Zambia, Rwanda, Kenya, Zimbabwe, and Nigeria pilot country-studies in M-LED - Zambia pilot country-study in OnSSET and NEST

AbstractThe energy transition both in MENA countries and at the international level entails massive consequences for the region. The chapter presents different factors determining the future geopolitical role for MENA oil and gas exporters as well as MENA hydrocarbon-poor countries. By doing so, the chapter identifies the possible strategies, competitive advantages and constraints that will define the future geopolitical relevance both in the hydrocarbon sector (for hydrocarbon-exporters) and in the clean energy sector (for all MENA countries).

AbstractThe chapter examines the domestic and international drivers and obstacles for the transformation in the MENA region. It outlines the major domestic sociopolitical and economic features that could both incentivize and discourage the energy transformation in the region. These are the pervasive role of oil rents, high energy subsidies, high dependence on cheap imported labour force and low role of private sector. The transformation is also pushed by rising international climate pressure but also the need to adapt and mitigate the existing negative consequences of climate change in the region, which are expected to exacerbate the regional fragile environment (e.g. rising temperatures and sea levels as well as water stress and scarcity).

AbstractThe chapter provides an analysis of the different strategies envisaged by each MENA country regarding the low-carbon energy transformation, mainly in the field of renewable energy sources. By examining the different national strategies, the chapter outlines how they depend on different level of commitments, ambitions and preferences regarding renewable energy sources and project size. Given their high potential, all MENA countries are considering solar projects, and to some extent wind projects (for example in Morocco and Egypt). The transformation of the global energy system and the internal challenges in MENA countries are the driving engines in the energy sector of these countries, though at varying speed depending also on their hydrocarbon endowment (or lack thereof).

AbstractThe chapter draws the main conclusions, provides key takeaways and addresses the still-open issues related to the energy transformation of the MENA region and their geopolitical consequences. The chapter outlines the main features of the energy transformation, such as the growing ambitions related to clean energy development and the difficulties to translate such ambition into reality. It also provides an overview of the features of the geopolitical transformation, such as the rebalance of alliances and power in the region and possible strategies to remain relevant in a decarbonized world (e.g. export of decarbonized products).

AbstractThe chapter examines key geopolitical aspects related to oil and gas in the MENA region. By proposing several key case studies related to the Gulf, Mashreq and Maghreb, the chapter outlines how the entire MENA region has become a major geopolitical hotspot given its key role in the current global energy system. Furthermore, the chapter takes into account several regional and international developments in order to assess the role of natural resources in the growing global energy competition.

This open access book offers an analysis of the energy sector in the Middle East and North Africa (MENA) region and its ongoing transformation.

AbstractThis chapter provides an introduction to the economics of electricity generation, presenting the major economic differences between the multiple power generation solutions and highlighting the comparative advantages and disadvantages of each. In order to provide a satisfactory treatment of power generation technology and economics, a single chapter would have expanded beyond a practical dimension: accordingly the discussion has been divided into a general introduction and a sequence of specific chapters each devoted to a different generation solution: thermal power based on fossil fuels (coal, oil, and gas), thermal power based on nuclear fission, hydroelectricity chapter, solar power, wind power, geothermal power, and power from tides and waves. The present introductory chapter explains where on the load curve the different power generation options should be placed depending on costs, the issue of dispatchability, as well as the difference in the economic cost approach between dispatching and future capacity planning. Also flexibility mechanisms to integrate a large share of non-dispatchable renewable energy sources are discussed. Finally, issues related to space occupation and locational constraints are addressed.

AbstractEurope’s energy landscape is characterized by a great heterogeneity due to differences in terms of population, economy, energy resources (availability of different energy sources) and differing policies in favor or against specific energy sources. Over the decades, the European energy mix has undergone important transformations. The EU set an energy policy framework based on three pillars (security of supply, competitiveness and sustainability) with the goal to address three different priorities: competitiveness (affordable prices), security (of energy supply) and sustainability (clean energy). These three pillars appear to pursue contradictory goals, especially in the short term, but they are seen as converging in the longer term. This chapter aims to analyze how these different objectives have been key drivers of the European energy policy and economics. To illustrate this, the authors also present five case studies: the United Kingdom, Italy, France, Germany and Poland. Lastly, the chapter presents the “European Green Deal”, whose ultimate goal is to reach carbon-neutrality by 2050. The chapter analyzes how a climate-neutrality goal requires a substantial transformation of the EU economy, which comes with some internal and external frictions.

In rural sub-Saharan Africa – the global poverty hotspot – the vast majority of cropland is rainfed only, resulting in reduced and unstable yields. Smallholder farmers account for 80% of agricultural production but they have limited access to relevant services to support both commercial operations and their livelihoods: more than two-thirds of rural dwellers have no access to electricity (crucial for crop irrigation, processing, and storage) and about 40% have no access to clean water. Previous research has analysed integrated technological and resource management approaches to tackle these overlapping development gaps. To finance and implement such transformations in resource-constrained settings, it is now crucial to understand the business and investment implications, also considering the strong regional population growth and the increasing frequency and intensity of climate extremes. Here, we lay out a research agenda that promotes the integration of multi-scale modelling excellence along the climate-water-renewable energy-agriculture-development Nexus and the creation of robust business models for private companies that can sustainably support private smallholder farmers of SSAin their effort to eradicate poverty and inequality. The proposed agenda is a cornerstone of the EC-H2020 project LEAP-RE RE4AFAGRI (“Renewable Energy for African Agriculture: Integrating Modelling Excellence and Robust Business Models”). In proposing the agenda, we highlight the importance of integrating energy access into the Nexus framework from both research and investment perspectives.

Achieving the Sustainable Development Goals (SDGs) requires ensuring universal energy access. Yet, governments of low-income countries face significant budget constraints for the capital-intensive infrastructure required to reach the hundreds of millions of households and businesses without grid electricity. In this context, private investors are the key actors capable of channelling such large capital requirements. Compared to the previous decades, the 2010s witnessed a growing mobilization of private funding in the off-grid electricity access sector, including some success stories. Nonetheless, with less than ten years left until the SDGs horizon, off-grid companies systematically struggle to ensure the financial sustainability of projects, as the industry still seeks to demonstrate its maturity and profitability. In this paper, we critically review the main business approaches adopted by private decentralised electricity access service providers. The aim of the analysis is to identify the main drivers of risk and failure which have been hindering sectoral investment. We then propose and discuss four potential game-changing factors that could foster the next generation of private investment in decentralised electricity solutions: (i) anchor-businesses-community (ABC) models; (ii) the design of integrated business models centred around income generation; (iii) the growing role for “local” financiers; (iv) the securitization of assets. Our paper targets private infrastructure developers and financiers aiming at fostering investment in financially sustainable decentralised electricity access projects.

AbstractThis chapter argues that pricing mechanisms are a key element of gas trade, as they concur to determine price levels and define commercial strategies. It explains why gas suppliers traditionally defended long-term oil-indexed contracts and analyses the main features of historical contracts. The old consensus on oil indexation, which had been a pillar of international gas trade for a decade, has been eroded in several regions. The chapter discusses how more impersonal market exchange now prevails. Beyond Europe and North America, Asia is also gradually moving towards a larger share of hub indexation, although it is still lagging behind in the process of establishing its own hubs. The chapter concludes that gas prices remain regional even if additional convergence is materialising thanks to the globalising effect of flexible LNG.

Globally about 800 million people live without electricity at home, over two thirds of which are in sub-Saharan Africa. Planning electricity access infrastructure and allocating resources efficiently requires a careful assessment of the diverse energy needs across space, time, and sectors. Because of data scarcity, most country or regional-scale electrification planning studies have however assumed a spatio-temporally homogeneous (top-down) potential electricity demand. Poorly representing the heterogeneity in the potential electricity demand across space, time, and energy sectors can lead to inappropriate energy planning, inaccurate energy system sizing, and misleading cost assessments. Here we introduce M-LED, a Multi-sectoral Latent Electricity Demand geospatial data processing platform to estimate electricity demand in communities that live in energy poverty. The platform shows how big data and bottom-up energy modelling can be leveraged together to represent the potential electricity demand with high spatio-temporal and sectoral granularity. We apply the methodology to Kenya as a country-study and devote specific attention to the implications for water-energy-agriculture-development interlinkages. A more detailed representation of the demand-side in large-scale electrification planning tools bears a potential for improving energy planning and policy.

This chapter concentrates on multilateral and development agencies, either located in Africa or pursing activities in the continent. The main objective is to understand what are their role in the financing of clean energy access in sub-Saharan Africa. The chapter primarily targets professionals collaborating with development agencies as well as public administrations of the countries involved in their management. It starts by presenting the inclusion of environmental considerations within those agencies, in addition to the historical objective to address social concerns as well as market failures. Moreover, this chapter aims at going beyond direct investments made by those institutions. Even though direct investments are crucial to bridge the financing gap associated with clean energy access, complementary solutions are needed to attract private capital at scale in this sector. Thanks to their international network and reputation, multilateral and development agencies have the potential to play an important role in this crucial development matter. Therefore, additional solutions are explored, such as advisory services and technical assistance (targeting public agencies, project developers and capital providers), stakeholder engagement, as well as mobilization tools to attract private financial actors. Finally, this chapter ends with a proposal of business model evolution for multilateral and development agencies, including (i) the integration of complementary activities to attract private capital, (ii) the support of the creation of an enabling business and investment environment, and (iii) the mitigation of potential associated barriers to implementation.